P16 water rate increase seen

MANILA, Philippines — Consumers might have to brace for an increase in water rates as high as P16 per cubic meter in the long term following the massive fines slapped on water firms for their non-compliance with environmental laws.

Consumer advocacy group Citizen Watch Philippines warned that the rates will likely increase by P12 to P16 per cubic meter as a result of the Supreme Court (SC) decision last month that will force water companies to finish their sewerage projects within the next five years.

“It is an estimate. The amount is more or less the supposed increase if rates that may be imposed by the concessionaires are spread over until the year 2037,” Citizen Watch convenor Teofilo Abejo said in a text message.

The group did not elaborate on how they came up with such computation.

The Metropolitan Waterworks and Sewerage System (MWSS) Regulatory Office could not also say how much the increase will be, although it admitted that an increase should be expected by 2022.

“It will have an impact on the next rate rebasing but we do not know the exact figure. We cannot say at this time. We have to wait for the next rate rebasing in 2022,” MWSS chief regulator Patrick Ty told The STAR.

Last month, the SC fined MWSS and its concessionaires Maynilad Water Services Inc. and Manila Water Co. Inc. almost P1 billion each for failing to finish their sewerage projects by May 2009 as required by the Clean Water Act.

The SC ruling imposed a daily fine of P322,102 until full compliance, further pressuring the MWSS and its concessionaires to comply and complete their projects by 2022.

Citizen Watch said the new decision is confusing because in 2011, the Supreme Court gave MWSS and its two concessionaires up to 2037 to comply since 17 government agencies which were tasked to prepare the way for MWSS and the concessionaires have not fully complied until now.

For instance, it pointed out, all local governments in Metro Manila must provide the land and right of way for the sewerage treatment plants, issue permits and identify all households and establishments that are not compliant with the law.

“Maynilad has a budget of almost P400 billion and Manila Water almost P200 billion to finish their sewerage projects up to 2037. Compressing these amounts into five years would result in higher water rates since sewerage and water rates are bunched together,” Abejo pointed out.

Maynilad’s all-in average charge is around P49 per cubic meter, which includes all charges like the environmental fee and value added tax. For Manila Water, it is P39.?“The problem now is how will they comply when the government agencies who must submit and do preparatory work are still remiss? Where is the land? Where is the overall plan from public works to guide them?” Abejo said.?By singling out the concessionaires, Citizen Watch emphasized that the SC is actually penalizing the citizens.

“The same Supreme Court already acknowledged this reality before, that is why the deadline was extended to 2037. This deadline gives time to everybody without burdening the public. It is a win-win. In the five-year program, nobody wins, not the government and definitely not us, the public,” Abejo added.

MWSS, Maynilad and Manila Water were supposed to provide wastewater treatment facilities and to connect sewage lines in all establishments, including households, to an available sewerage system within five years after effectivity of the law in 2004.